CU-BSC.TTM-SEM-IV-Tourism policy & Planning

 In order to boost private businesspersons for setting up of tourism units, the State is giving incentive of 15 per cent as capital investment subsidy up to a maximum Rs. 50 lakhs.  The new Hotel units opened in the tribal areas are exempt from giving luxury tax for a time period of 10 years (from 1st April, 2012).  Overdue payment of luxury tax by Hotels and tourism Units  Special incentives for satellite towns and Cyber cities will be given with investment of over USD 21.5 million by NRIs and foreign investors 5.2 Punjab  Land would be easily provided on nominal terms for setting up of hotels and restaurants.  Soft loans are given for setting up of new tourism projects and for extension of the old tourism projects Haryana  No charge on electricity for five years for tourism purpose 101 CU IDOL SELF LEARNING MATERIAL (SLM)

 Provisions for personalised (tailor-made) incentives for tourism projects having outlay of INR 0.3 billion.  The tourism projects are given facilities for Land auction and institutional finance. Uttarakhand  100% exemption on entertainment tax for first three years and 30% for the next five years  100% tax exemption on amusement parks and ropeways for five years 5 years  The new projects are given subsidy to the tune of INR 3 million as facility of Capital investment.  The new tourism units will have no tax/rebate for 5 years for payment of the luxury tax.  20% Assistance/Support is given for investment of INR 1million.  Easy land availability on equitable price for tourism on certain terms and condition applied 102 CU IDOL SELF LEARNING MATERIAL (SLM)

Jammu & Kashmir  INR 0.7 million capital subsidy for taxi driver or operators.  The tourism unit project which hasvaluation (costing) of more than INR 250 million, have capital subsidy (aid) up to INR 10 million).  There is subsidy for conversion of travel agencies to the level of 50% in project cost.  The houseboats in Kashmir are given subsides for repair and maintenance.  Grants i.e. subsidy to the tune of INR 0.7 million given on adventure equipment. Rajasthan 103 CU IDOL SELF LEARNING MATERIAL (SLM)

 There is no tax for seven years for the new tourism entities. (50% stamp duty exemption, 100% luxury tax exemption, 50% electrical duty exemption, 50% entertainment duty exemption, 50% conversion charges).  Hotel and motel can avail interest subsidy  Tourist areas have to pay low land conversion charges  Institutional finance is also provided for tourism units Uttar Pradesh 104 CU IDOL SELF LEARNING MATERIAL (SLM)

 A large of benefits given to organisations working in tourism sector such as exemption of five years on luxury and entertainment tax in case of new ropeways, exemption of trade tax for restaurants.  The paying guest houses have exemption for entertainment tax.  No charges on stamp duties  10% subsidy and capital subsidy schemes for Heritage hotels  Facility of institutional (organisational) finance and monetary support to tourism amenities in hilly areas. Kerala 105 CU IDOL SELF LEARNING MATERIAL (SLM)

 Industrial Tariff on electricity charges for the first 5 years for Tourism Projects classified as responsible tourist projects.  Investment Subsidy subject to a maximum ceiling limit of Rs 20 lakhs Gujarat 106 CU IDOL SELF LEARNING MATERIAL (SLM)

 Land Bank Policy to identify and earmark land to be provided for tourism projects.  Different financial benefits (i.e. incentives) are given in 2010-2015 including tax breaks (holidays) such as luxury tax in hotels. Also, there is decrease in VAT charges on F and B (i.e. food & beverage), natural gas and reduction in entertainment tax. Maharashtra 107 CU IDOL SELF LEARNING MATERIAL (SLM)

 Luxury Tax exemption available to new units and also during expansion of new units for a period of 7& 10 years based on location.  Exemption from Entertainment Tax for a specific period (5, 7 or 10 years) based on location and nature of tourism project  Property Tax for Tourism Projects at Residential Tax Rates Madhya Pradesh  Capital Subsidy to new Hotels & Resorts at select tourist destinations.  New Tourism projects exempt from entertainment tax for 10 years.  Caravan buses used for tourist transport purposes are exempt from road tax for a period of 5 years. Karnataka 108 CU IDOL SELF LEARNING MATERIAL (SLM)

 Concession in stamp duties for new tourism projects.  Lower Registration charges for new projects as per the industrial policy.  Investment subsidy between RS 10 lakhs and RS 30 lakhs.  100% exemption of entertainment tax for all newly constructed cinema theatres for 3 years Andhra Pradesh 109 CU IDOL SELF LEARNING MATERIAL (SLM)

 Capital Investment subsidy with a maximum ceiling of Rs. 30 lakhs  Repayment of Stamp Duty and Transfer Fee paid for registration  Compensation of 25% VAT paid in a financial year as a grant to pay VAT in the following year.  25% entertainment tax will be ploughed back for entertainment components in theme parks. Orissa  Capital Investment subsidy for all new projects subject to a maximum ceiling of Rs.40 lakhs. Interest subsidy for all new tourism projects, where the investment is more than Rs. 10 lakhs, subject to a maximum of Rs.1 Crore.  on purchase of land for tourism projects 50% discount on stamp duty is given Compensation of 30% of real net VAT paid subject to a maximum of Rs.10 lakh per annum West Bengal 110 CU IDOL SELF LEARNING MATERIAL (SLM)

 Capital Subsidy for new tourism projects subject to a maximum ceiling of Rs.150 lakhs of subsidy.  Interest Subsidy to the extent of 50% of the annual interest liability, subject to a limit of Rs25 Lakhs per year.  Waiver on electricity duty  On the registration fee paid for tourism projects refund of 50% of stamp duty will be given back 8.4 SUMMARY  In order to start or expand any small or large business there is a need for capital or funds, without capital it is very difficult to start or run a business. Every business 111 CU IDOL SELF LEARNING MATERIAL (SLM)

requires or need capital or funds at the time of initial start and for its day to day operations.  In order to fulfil the demand for capital or funds there are number of organisations both public and private, national or International who are providing financial assistance to both small scale and large-scale industry.  In Tourism business there is a need for capital or funds for the starting or for its operation, and there are different corporations and organisations who are funding tourism project all over the country. For instance, ITDC, TFCI, Ministry of tourism, ministry of environment, Different state tourism boards, Angel investors etc. also there are international organisations who are funding tourism project all across the globe some of them are UNWTO, UNESCO, IMF, ADB etc. Both these national and international organisations play an important role in the development of small and large-scale businesses in Tourism and Travel trade.  The Ministry of tourism (MOT), Government of India (GOI) and various state tourism departments also provide or give different concessions and incentives for starting or running a tourism business in the country with the aim of development of the Tourism industry and the economy as a whole and focus on sustainable side of tourism development which would be beneficial for both socio-economic and environment development and preservation of natural resources of the country And to boost the flow of tourists in the country and make the tourism industry more organised and improve the status of tourism in the country. 8.5 KEYWORD  ITDC – India Tourism Development Corporation  IMF – International Monetary Fund  ADB – Asian Development Bank  ETP- RTS - Endogenous Tourism Project-Rural Tourism Scheme  UNESCO- United Nations Educational, Scientific and Cultural Organization  TFCI – Tourism Finance corporation of India  UNWTO – United Nations World Tourism Organization.  MOT – Ministry of Tourism  GOI – Government of India  ASI- Archaeological Survey of India 112 CU IDOL SELF LEARNING MATERIAL (SLM)

 UNDP - United Nations Development Programme 8.6 LEARNING ACTIVITY 1. Various funding, incentives and concessions in tourism ___________________________________________________________________________ ___________________________________________________________________________ 2. Funding sources in India for tourism development ___________________________________________________________________________ ___________________________________________________________________________ 8.7UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Define Tourism funding? 2. What is Incentives in tourism? 3. What is concession? 4. What are the state tourism department for tourism funding? 5. Define TFCI. Long Questions 1. UNESCO plays an important role in funding of different projects in the area of tourism. Explain. 2. Discuss the role of UNWTO in tourism development funding? 3. Elaborate the incentives and concession provided by the government in Himachal Pradesh? 4. What are the taxes and concessions provided by Uttarakhand state tourism? 5. Briefly explains the various concessions provided in Orissa, Jammu Kashmir, and Himachal. B. Multiple Choice Questions 113 1. ITDC was established in a. 1966 b. 1976 CU IDOL SELF LEARNING MATERIAL (SLM)

c. 1987 d. 11988 2. Tourism finance corporation was established in a. 1990 b. 1097 c. 1989 d. 1988 3. IMF refers to a. Indian Monetary fund b. International Monetary fund c. Income Monetary fund d. Inland Money fund 4. ITDC refers to a. India Tourism Development corporation b. International tourism development corporation c. Indonesia tourism development company d. Inland tourism Device Company. 5. World Bank is a major source of funding through out___ a. India b. US c. EU d. World Answers 1-a, 2-c, 3-b, 4-a, 5-d 8.8 REFERENCES  Bhatia A.K., Basics of Tourism Management, Sterling Publishers Pvt Delhi, 2010 114 CU IDOL SELF LEARNING MATERIAL (SLM)

 Bhatia A.K., the Business of Tourism: Concepts and Strategies, Sterling Publishers Pvt Delhi, 2010.  http://cooperation.unwto.org  http://www.angelfire.com/ks/andriotis  http://www.ukessays.com  http://www.usbr.gov/lc/yuma/environmental_docs/Coachella/coachellachap3.pdf  https://www.monroecollege.edu/uploadedFiles/_Site_Assets/PDF/Natioanl%2 0and%20Regional%20Tourism.pdf  Inskeep Edward, Tourism Planning: An Integrated and Sustainable Development, John Wiley & Sons Inc Publications, New York.  Kumar Misra Suddhendu Narayan and Sadual Sapan, Basics of Tourism Management, Excel Books.  Prasad VV Vara, Travel & Tourism Management, Sundari VBT Publications 115 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 9: RESOURCES OF FUNDING STRUCTURE 9.0 Learning Objectives 9.1 Introduction 9.2 Sources of Funding 9.3 Organizational structure of TFCI 9.3.1 Objectives of TFCI 9.3.2 Operations of TFCI 9.3.3Role of TFCI 9.4Case study on ITFC 9.5Summary 9.6Keywords 9.7Learning Activity 9.8Unit End Questions 9.9References 9.0LEARNING OBJECTIVES After studying this unit, you will be able to:  explain the process of transformation of travel of past into tourism of today;  discuss various types and related purposes of tourism;  explain the variety and value of tourist resources of India;  explain the causes and factors responsible for the growth of tourism;  analyse the area development through the promotion of tourism 9.1INTRODUCTION Funding 116 CU IDOL SELF LEARNING MATERIAL (SLM)

 Funding refers to providing or lending financial assistance or resources to finance a need, program or project. In general funding means when a particular firm fills the need of cash of other firm or organisation from its internal reserves.  Funding also means lending grants of authority to an agency, department or a unit to incur their monetary obligations and to pay for them  Funding in simple words is giving or facilitating fiscal or financial aid to other agency or firm for starting a new business or incurring the day to day expenses of the business. Funding also supports other business to expand its current operations and upsurge their market reach.  Funding is the act of contributing financial resources, mostly in the form of money, or other values such as effort or time, to finance a need, program, and project, generally by a private institute or government.  This word is used when a firm uses its internal assets to accomplish its prerequisite for cash, while the term funding is used when the firm gains capital from external sources. 9.2 SOURCES OF FUNDING Sources of Funding There are numerous numbers of national and International organizations funding tourism projects in the country. Some of them are: Ministry of Tourism, Government of India: Ministry of tourism is one of the major organizations, which is funding a large number of tourism projects throughout the country. Projects like development of tourism infrastructure for instance, development of airports, railways, hotel and restaurants, eco- tourism projects, rural tourism projects etc. 117 CU IDOL SELF LEARNING MATERIAL (SLM)

Various State tourism departments: Different state tourism department are also playing a crucial role in funding tourism projects in their states. The focus is to develop tourism projects like adventure tourism spots, rural tourism sites, ecotourism sites, development of places of importance. For instance, religious sites in the state, development of health and Yoga tourism and state tourism department also give financial assistance to tour operators, travel agents, hotels and homestays etc. Tourism Finance Corporation of India is also source of funding in the tourism sector: TFCI is one of the major organization funding tourism projects in India. TFCI normally considers financial assistance to projects with capital cost of at least RS 20 crore, but for providing financial assistance to heritage hotels, restaurants, food courts, pubs, tour operators, travel agents, transport sector, health spa /centres, recreational facilities and renovation / up gradation/expansion, lower project cost could be considered depending on the nature of the project, past track & credit record. Indian Tourism Development Corporation (ITDC) Is also source of funding in the tourism sector: ITDC also funds various tourism projects throughout the country, the focus is on development of the hotels and other hospitality related units? ITDC aims to fulfill the increasing demand for accommodation and maintain the world class standards. 118 CU IDOL SELF LEARNING MATERIAL (SLM)

United Nations World Tourism Organization (UNWTO): It is a very important organization in the world, which is funding a lot of tourism project across the globe, keeping in mind sustainable development, UNWTO focuses for the development of tourism and maintain world class standard in the development process. United Nations Educational, Scientific and Cultural Organization (UNESCO) also funds tourism projects:  UNESCO plays an important role in funding of different projects in the area of tourism. The preservation and safeguard of World Heritage sites wouldn’t be possible without the monetary resources to encounter World Heritage needs. 119 CU IDOL SELF LEARNING MATERIAL (SLM)

 Sources of revenue include the World Heritage Fund, which obtains most of its income from compulsory contributions from countries (States Parties) and from voluntary contributions.  Other sources of revenue comprise of profits pumped out of from auctions of World Heritage publications, or funds-in-trust that are donated by countries for particular work. Angles investors also funds tourism projects: Angle investors are very important private organization funding tourism projects. He is a rich or affluent person/institution who gives capital for a business start-up, for convertible debt or ownership equity. This segment of investors is growing up through online equity and invests their capital or their guidance to their portfolio companies. Angle investors put up their money or capital in minor start-ups or entrepreneurs. They may give one-time investment to move the business and encourage the company in their hard times. He is also known as informal investor, angel funder, business angel, seed investor or private investor. The World Bank Group: The World Bank is a major source of funding for various projects throughout the world. It also funds various tourism projects across the globe. World Bank works on all major areas of development and provides financial products and technical assistance. It focuses majorly on development of rural areas and improving the quality of lives of people of different communities. International Monetary fund (IMF): 120 CU IDOL SELF LEARNING MATERIAL (SLM)

IMF is an international organization with members of 189 countries, functioning to raise global monetary cooperation, secure financial stability, facilitate international trade, encourage high employment and sustainable economic growth, and elevate poverty around the world. IMF also is a major source of funding for various tourism projects in India and Internationally. It also gives financial assistance for tourism projects like rural and eco- tourism areas development. Ministry of Rural Development and Ministry of Environment: 121 CU IDOL SELF LEARNING MATERIAL (SLM)

Ministry of rural development is also a major source for funds for the development of tourism projects like rural tourism areas and even ministry of environment also gives financial assistance for development of rural sites and environment protection like protection of national parks and biodiversity reserves for tourism. Ministries of environment have been conducting various environment protection program and projects and fund these projects. Asian Development Bank (ADB): The Asian Development Bank (ADB) is a local development bank founded on 19 December 1966, which is headquartered in the Ortigas centre situated in Mandaluyong, Metro Manila, Philippines. Asian development bank also preserves 31 field offices throughout the world to 122 CU IDOL SELF LEARNING MATERIAL (SLM)

encourage social and economic development in Asia. Asian development bank also offers funding and financial assistance for tourism projects in India and across Asia (Miller & Twining-Ward, 2005). Tourism Finance Corporation of India was set up a specialized all India Financial Institution to financing/funding requirements of the Tourism and Hotel industry. It was sponsored by IFCI along with other financing institutions and banks which are notified as Public Financial Institutions under Section 4-A of the Companies Act 1956 and have Financing Participation scheme of all India financial institutions. Tourism Finance Corporation of India was incorporated as a public limited company under the Company Act, 1956 on 27th January 1989. The operational activities were started on 1st February 1989. It was set up as a specialized cell to cater to the needs of Tourism and Hotel Industry. It was expected to ensure priority in funding tourism and tourism-related projects. TFCI has to undouble made a dent in the tourism sector. It has been showing better performance since its inception in 1989. The investment of TFCI has grown appreciably over the year from Rs. 265 crores to Rs. 6,978 crores in 2001-02. TFCI is a commercial venture and hence it cannot afford to finance those tourism and hotel project which do not ensure recovery of interest and the principal amount of loan in time. It will help TFCI in generating some surplus which is so essential for further expansion of its activities. 123 CU IDOL SELF LEARNING MATERIAL (SLM)

9.3 ORGANIZATIONAL STRUCTURE OF TFCI Generally, the organizational structure serves three basic functions. These include: (i) It intends to produce output to achieve the business objectives. (ii) It minimizes the influence of individual variation on the organization. (iii) It helps in performing activities, decisions and other relationships in a systematic manner. The organizational structure of TFCI is consisting of the board of directors, managing directors and other professional staff at middle and lower levels. Theoretically, the board of directors is a supreme organ of the management of TFCI. However, in practice, the managing director wields the real power because of directors almost delegates its powers to the managing directors (M.D). TFCI organizational structure The main function of the board is to formulate the policies and strategies while M.D is responsible for the execution and implementation of these policies and strategies. He directs co-ordinates and controls day to day functioning of TFCI. 9.3.1 Objectives of TFCI According to Memorandum and articles of associations, the main objectives of TFCI are: 1. To commence and carry on the business of assisting industrial, commercial, professional and trading enterprises – corporate bodies, partnership firms, trust, individuals or other concern whosoever constituted and engaged or to be engaged in setting up and development of tourism, hotel, and tourism-related activities. 2. To commence and carry on the business of lending or granting by way of loans or advances in rupees and/or foreign currency or in any other form money with or without interest or with or without security for the purpose of assisting enterprises in India. 3. To commence and carry on the business of facilitating, through the grant of loans and other financial, technical and professional assistance, the acquisition, maintenance, modification, construction, reconstruction, refurbishing and renovation of tourism and travel related activities. 124 CU IDOL SELF LEARNING MATERIAL (SLM)

4. To commence and carry on the activities of coordinating and formulating guidelines and policies relating to the financing of all such projects in the tourism and tourism- related activities, facilities and services. 5. To commence and carry on the development and promotional functions with regard to tourism and tourism-related activities. 6. To commence and carry on the business of merchant banking and other allied activities. 7. To commence and carry on the business as assessors, designers, draftsman, estimators, surveyors and other materials. 8. To commence and carry on or be interested in the business of buying, selling, distributing, leasing, exporting and importing of furniture, machinery, equipment, and other material. 9. To carry on business as share brokers and agents of insurance for all kinds and for all of the risks. 10. To carry on the business of agents for the central or state government or any other international or national institution or organization in the transaction of any business concerned with tourism and tourism-related activities, facilities and services. 9.3.2 Operations of TFCI TFCI provides all forms of financial assistance to enterprises for setting and developing travel and travel related activities, facilities and services. It also coordinates and formulates policies and strategies related to the financing of tourism projects. Since its inception, the company has been playing a catalytic role in providing all forms of financial assistance for new, expansion, diversification and modernization project in the tourism industry and related activities. The major functions of TFCI are following as:  Rupee loans  Underwriting of public issue of share/debenture and direct subscription on such securities.  Guarantee for deferred payments and credits raised in India and/ or abroad.  Equipment finance and equipment leasing.  Assistance under supplier’s credit.  Merchant Banking and Advisory services. 125 CU IDOL SELF LEARNING MATERIAL (SLM)

TFCI is operating on similar lines as other all India Financial Institutions. It provides financial assistance for the project in the tourism industry on its own and in consortium with other all India Financial Institutions, namely IFCI, IDBI, and ICICI. The tourism projects financed by TFCI include inter alia Hotel restaurants, Holiday Resorts, Amusement Parks and Sports, Safari Park Ropeways, Convention Halls, Transport, Travel, and Tour operating agency, Air Taxi Services, Tourist Emporia, Sports facilities etc. TFCI is financing non-conventional and small projects which were not eligible for institutional finance earlier but are heaving great importance from tour point of view. Hence, TFCI is playing a developmental role for promote of tourism within the overall policies of the Government of India. The present product lines of TFCI consist following main areas: (a) Project Financing (b) Financial Services (c) Investment TFCI Direct Assistance Under direct assistance TFCI provides:  Loans  Underwriting and direct subscription to the share and debentures  Equipment financing and leasing  Guarantees  Technical Development Fund Indirect Assistance TFCI provides a significant share in the total assistance to tourism enterprises indirectly through other financial institutions like SFCs, SIDCs, and commercial banks. These are:  Refinancing of the Industrial loan  Bill Finance  Seed Capital Assistance 126 CU IDOL SELF LEARNING MATERIAL (SLM)

 Bridge Financing 9.3.3 Roles of TFCI The TFCI has been endeavoring to take such steps which are considered vital in preparing the base of the tourism industry in the country. TFCI has been playing an increasingly important role. These are following as:  To provide assistance to the project located in identified backward and hill areas of the country.  It plays a vital role in achieving the growth targets set for the travel and tourism industry.  It plays a pivotal role in motivating private investors to put their fund in travel related projects.  TFCI helps in attracting more and more investment into the non-conventional segments of tourism industry such as adventure tourist resorts, ropeways, human resource training, institutes, ferries, and air taxis and other tourism promotional facilities.  To suggest a measure, TFCI should forecast the financial requirements of the travel and tourism sector.  To maintain good coordination among enterprises and other financial institutions. Travel and Tourism infrastructure requires an extensive investment of both public and private sectors to finance the preliminary planning, development stages, and fixed assets. Due to the huge investments, travel and tourism industry are also known as the ‘capital-intensive industry’. ITFC plays an important role in the promotion and development of tourism in India. 9.4 CASE STUDY ON ITFC It has undoubtedly been a challenging year for businesses across various sectors, especially with recent partial lockdowns. Tourism and Hospitality business was also hit adversely due to this. However, despite the challenges, Tourism Finance Corporation of India (TFCI), a premier institution catering to the financing needs of hospitality industry demonstrated resilient performance during the previous Financial Year. It reported a PAT of Rs. 81 crores in FY21 with a loan book at Rs 1977 crores. 127 CU IDOL SELF LEARNING MATERIAL (SLM)

TFCI was able to show a growth in AUM, stable earnings and asset quality, primarily on account of its prudent selection of assets, stringent monitoring and recovery mechanisms and appropriate structuring. With a CAR of 39.87%, the company is well capitalized to grow its books exponentially in future. The company was also able to maintain it’s NIM to 5.31% even during these trying times. TFCI has focused on building its books by leveraging the opportunities presented in the MSME segment. As on March 31, 2021, 84% of its AUM was in MSME segment. Various supports and thrust given by Government of India (GOI) to this segment of economy, has helped TFCI maintain growth in its loan book. Further, though the initial period of FY21 witnessed complete lockdown, with virtually no mobility, the latter half witnessed travel and tourism demand picking up substantially. It led to the rise in demand for the domestic tourism industry which also resulted in improved occupancy rates for the hotel with certain segments of the industry running in almost full capacities. Most of TFCI’s assisted entities also saw ARRs and Occupancies improving considerably during October 2020 to February 2021. However, an unprecedented surge in Covid-19 cases in the ongoing second wave has slowed down the economic growth trajectory and will have some impact in Q1 FY22. However, one positive indicator is that, in comparison to last year, the present lockdowns are lesser stringent and more business friendly. As Mr Anirban Chakraborty, Managing Director, TFCI has to say: “One positive indicator is that, in comparison to last year's calamity, the recent dip in mobility has not been as sharp as seen during the lockdown in March 2020 and we expect that the travel and tourism sector will show recovery and return to normalcy with a bang on the back of a pickup in consumption, as the vaccination rate improves and the local restrictions start to ease out in the coming quarters” Certain measures by the GOI viz., broadening the inoculation drive for 18+ aged populations, extension of the scope of ECLGS for the Travel & Tourism Sector, liquidity measures for NBFCs and last-mile lenders, shall yield positive results over the next few quarters. Though the second wave slowed down the recovery rate, we are already witnessing reopening in various pockets of the country. With large scale vaccinations, it is expected that business-as- usual is not going to be a distant dream. 128 CU IDOL SELF LEARNING MATERIAL (SLM)

9.5SUMMARY  Funding refers to providing or lending financial assistance or resources to finance a need, program or project. In general funding means when a particular firm fills the need of cash of other firm or organisation from its internal reserves.  Ministry of tourism is one of the major organizations, which is funding a large number of tourism projects throughout the country. Projects like development of tourism infrastructure for instance, development of airports, railways, hotel and restaurants, eco- tourism projects, rural tourism projects etc  UNESCO plays an important role in funding of different projects in the area of tourism. The preservation and safeguard of World Heritage sites wouldn’t be possible without the monetary resources to encounter World Heritage needs.  Angle investors are very important private organization funding tourism projects. He is a rich or affluent person/institution who gives capital for a business start-up, for convertible debt or ownership equity. This segment of investors is growing up through online equity and invests their capital or their guidance to their portfolio companies.  The World Bank is a major source of funding for various projects throughout the world. It also funds various tourism projects across the globe. World Bank works on all major areas of development and provides financial products and technical assistance. It focuses majorly on development of rural areas and improving the quality of lives of people of different communities.  IMF is an international organization with members of 189 countries, functioning to raise global monetary cooperation, secure financial stability, facilitate international trade, encourage high employment and sustainable economic growth, and elevate poverty around the world.  Tourism Finance Corporation of India was incorporated as a public limited company under the Company Act, 1956 on 27th January 1989. The operational activities were started on 1st February 1989. It was set up as a specialized cell to cater to the needs of Tourism and Hotel Industry. It was expected to ensure priority in funding tourism and tourism-related projects. 129 CU IDOL SELF LEARNING MATERIAL (SLM)

9.6 KEYWORD  IFCI – Indian finance corporation of India  IDBI - Industrial Development Bank of India  ICICI- Industrial Credit and Investment Corporation of India  SFCs - State Finance Corporations  SIDCs - State Industrial Development Corporations  MSME - Micro, Small and Medium Enterprise 9.7 LEARNING ACTIVITY 1. Define Funding ___________________________________________________________________________ ___________________________________________________________________________ 2. State the objectives of TFCI ___________________________________________________________________________ ___________________________________________________________________________ 9.8 UNIT END QUESTIONS A. Descriptive Questions Short Questions: 1. Define Funding? Explain the main purpose of funding? 2. List the various sources of funding 3. What is the role of World Bank group in tourism project development? 4. Briefly explain the role of IMF. 5. Explain the role of ITDC in tourism development? Long Questions 1. Ministry of tourism is one of the major organizations, which is funding a large number of tourism projects. Justify? 2. Explain the role of UNESCO in funding projects in the area of tourism? 3. Which is the bank which provides funds for rural tourism? 4. Describe the organisation structure of TFCI? 5. Explain the operations of TFCI? 130 CU IDOL SELF LEARNING MATERIAL (SLM)

B. Multiple Choice Questions 131 1. Funding refers to ________assistance. a. Lending b. not providing c. securing d. agency 2. TFCI refers to a. Tourism Finance corporation of India b. Travel finance corporation of India c. Transport finance corporation international d. Travel fund company in India 3. An ITDC fund focuses on……… a. Infrastructural development b. Development of hotels c. Development on logistics d. Developments on airports 4. UNWTO funds focuses on a. Development on logistics b. Developments on airports c. Developments on world class standards d. Developments on hotels 5. World Bank group funds focuses on a. Development on logistics b. Developments on airports c. Infrastructural development d. Development of rural areas. CU IDOL SELF LEARNING MATERIAL (SLM)

Answers 1-a, 2-a, 3-b, 4-c, 5-d 9.9REFERENCES  Nath Dhar Prem, Development of Tourism and Travel Industry: An Indian Perspective, Kanishka Publications, New Delhi.  Problems encountered by tourists by Madhavi Chockalingam, A. Auroubindo Ganesh  Sinha R.K., Tourism Strategies, Planning and Development, Common Wealth Publishers.  Tourism Destination Planning by University of Hawai’i, Manoa.  Tourism Management 20 (1999) 183— 185 by Dimitrios Buhalis.  Tourism Planning by Ramakrishna Kongalla, Assistant Professor at Assistant Professor, IITTM, Gwalior.  Tourism Planning by Ramakrishna Kongalla, Assistant Professor at Assistant Professor, IITTM, Gwalior 132 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 10: PLANNING FOR TOURISM DESTINATIONS -I STRUCTURE 10.0 Learning Objectives 10.1 Introduction 10.2 What is a Destination? 10.3 Elements of Tourism Destinations 10.4 Destination Planning 10.5 Importance of Tourism Destination Planning 10.6 Summary 10.7 Keywords 10.8 Learning Activity 10.9 Unit End Questions 10.10 References 10.0LEARNING OBJECTIVES After studying this unit, you will be able to:  To facilitate the assessment of the tourism potential of a destination  To prepare tourism development plan as well as marketing techniques;  To familiarize with the destination branding practices; and  To introduce advanced analysis and research in the field of destination development. 133 CU IDOL SELF LEARNING MATERIAL (SLM)

10.1INTRODUCTION When we think of tourism, we think primarily of people who are visiting a particular place for sightseeing, visiting friends and relatives, taking a vacation, and having a good time. They may spend their leisure Notes 4 time engaging in various sports, sunbathing, talking, and singing, taking rides, touring, reading, or simply enjoying the environment. If we consider the subject further, we may include in our definition of tourism people who are participating in a convention, a business conference, or some other kind of business or professional activity, as well as those who are taking a study tour under an expert guide or doing some kind of scientific research or study. These visitors use all forms of transportation, from hiking in a wilderness park to flying in a jet to an exciting city. Whether people travel by one of these means or by car, motor-coach, camper, train, taxi, motorbike, or bicycle, they are taking a trip and thus are engaging in tourism. 134 CU IDOL SELF LEARNING MATERIAL (SLM)

This lesson will discuss tourism planning approaches to achieve the goals and objectives of tourism development for a destination. For the purposes of discussion, a tourism destination can mean an entire country, a region, an island, a resort area, or a single project. The tourism plan is generally a formal document to guide both public sector and private sector development activities. Destination planning includes many different forms of planning such as economic development planning, land use planning, infrastructure planning, and social services planning and involves many groups with different perspectives including governments, private investors and developers, and local communities. 10.2 WHAT IS DESTINATION? One of the most frequently used words in tourism is ‘destination’, but it is used very differently by different authors. In the literature ‘destinations’ seem to be described as images, as narratives. ‘Destinations’ seem to be described through their content of attractions, facilities and services. At ‘destinations’ interactions may take place: between the tourists and the businesses, mutually in the tourist industry, and between the single establishment and the tourist organizations and the authorities. Burkart and Medlik’s (1974) defined the destination as ‘the geographical unit visited by a tourist may be a self-contained centre, a village or a town or a city, a district or a region, an island, a country or a continent. Notes 6 This geographical unit may be described as the tourist destination….The tourist destination, however defined geographically, provides a convenient focus for the examination of the tourist movement and of its manifold impact and significance. How important any geographical unit is as a tourist destination, or how it is potentially, is determined by three prime factors: attractions, accessibility and amenities which may be termed the tourist qualities of a destination. Mill and Morrison (1992) deal with the destination as a part of the tourism system. Their definition says: At a destination there is a mix of interdependent elements. The elements are interdependent, because in order to produce a satisfying vacation experience, all elements must be present. The destination is composed of: Attractions – Facilities – Infrastructure – Transportation – Hospitality. Jensen, Hansen and Metz’ (1993) definition is very close to that we have learned earlier: The definition of a tourist destination is a geographical area, which contains landscape and cultural characteristics and which as in the position to offer a tourism product, which means a broad wave of facilities in transport – accommodation – food and at least one outstanding activity or experience. 135 CU IDOL SELF LEARNING MATERIAL (SLM)

What is Tourism Destination? What is Tourism Destination? A tourism destination is a physical space in which a tourist spends at least one overnight. It includes tourism products such as support services and attractions and tourist resources within one day’s return travel time. It has physical and administrative boundaries defining its management, and images and perceptions defining its market competitiveness. Local destinations incorporate various stakeholders often including a host community and can nest and network to form larger destinations. Destinations could be on any scale, from a whole country (e.g., India), a region (such as South India) or island (Andaman), to a village, town or city, or a self-contained centre (MGM Park, Chennai). 10.3 ELEMENTS OF TOURISM DESTINATIONS Elements of Tourism Destination Tourism destination is constituted by the following six elements. There are briefly discussed in the line of depicted figure. 136 CU IDOL SELF LEARNING MATERIAL (SLM)

Elements of Tourism Destination Attractions Accessibility Image and Character Price Amenities Human Resource Attractions: These are often the focus of visitor attention and may provide the initial motivation for the tourist to visit the destination. These can be categorized as natural (e.g. beaches, mountains, parks, weather), built (e.g. iconic buildings such as the Eiffel tower, heritage monuments, religious buildings, conference and sports facilities), or cultural (e.g. museums, theatres, art galleries, cultural events). They could be in the public realm such as a nature park, cultural or historical sites or could be community attractions and services such as culture, heritage or lifestyle. Other, less tangible factors, such as uniqueness and emotional or experiential triggers are also attracting tourists to destinations. Amenities: These are the wide range of services and facilities which support the visitors’ stay and include basic infrastructure such as utilities, public transport, and roads as well as direct 137 CU IDOL SELF LEARNING MATERIAL (SLM)

services for the visitor, ‘Destination’, includes accommodation, visitor information, recreations facilities, guides, operators and catering and shopping facilities. Accessibility: The destination should be accessible to a large population base via road, air passenger services, and rail or cruise ships. Visitors should also be able to travel with relative ease within the destination. Visa requirements, ports of entry, and specific entry conditions should be considered as part of the accessibility of the destination. Image: A unique character or image is crucial in attracting visitors to the destination. It is not sufficient to have a good range of attractions and amenities if potential visitors are not aware of this. Various means can be used to promote the destinations image (e.g. marketing and branding, travel media, marketing). The image of the destination includes uniqueness, sights, scenes, environmental quality, safety, service levels, and the friendliness of people. Human Resources: Tourism is labour intensive and interaction with local communities is an important aspect of the tourism experience. A well-trained tourism workforce and citizens who are equipped and aware of the benefits and responsibilities associated with tourism growth are indispensable elements of tourism destination delivery and need to be managed in accordance with the destination strategy. Price: Pricing is an important aspect of the destination’s competition with other destinations. Price factors relate to the cost of transport to and from the destination as well as the cost on the ground of accommodation, attractions, and food and tour services. A tourist’s decision may also be based on other economic features such as currency exchange. 10.4 WHAT IS PLANNING? Planning is mental activity, which involves desk work to decide or answer the questions what, how, when, where and who. It is all about setting and meeting objectives and preparing future course of action. Tourism Destination Planning Tourism provides a major economic development opportunity for many countries and a means of improving the livelihoods of its residents. Both the public and private sectors involved in tourism depend on planning to achieve sustainable tourism development that respects the local community, creates appropriate employment, maintains the natural environment, and delivers a quality visitor experience. However, many tourism destinations have pursued development without proper planning and without considering the many impacts such development will bring to the community. The Tourism Planning Process 138 CU IDOL SELF LEARNING MATERIAL (SLM)

Levels of Tourism Planning: Tourism planning is implemented at different levels from the general level which may apply to an entire country or region down to the local level which may apply to detail planning for specific resort. What is important to emphasize is the tourism planning and development must be integrated among all levels to take into account different levels of concern and to avoid duplication of efforts and policies. Each level involves different considerations as follows: International level - Tourism planning at the international level involves more than one country and includes areas such as international transportation services, joint tourism marketing, regional tourism polices and standards, cooperation between sectors of member countries, and other cooperative concerns. National level - Tourism planning at the national level is concerned with national tourism policy, structure planning, transportation networks within the country, major tourism attractions, national level facility and service standards, investment policy, tourism education and training, and marketing of tourism. Regional level – Tourism planning at the regional level generally is done by provinces, states, or prefectures involving regional policy and infrastructure planning, regional access and transportation network, and other related functions at the regional level. Local or community level- Tourism planning at the local level involves sub-regions, cities, towns, villages, resorts, rural areas and some tourist attractions. This level of planning may focus on tourism area plans, land use planning for resorts, and planning for other tourism facilities and attractions. Site planning level - Site planning refers to planning for specific location of buildings and structures, recreational facilities, conservation and landscape areas and other facilities carried out for specific development sites such as tourism resorts and may also involve the design of buildings, structures, landscaping and engineering design based on the site plan. 10.5 IMPORTANCE OF TOURISM DESTINATION PLANNING Tourism planning is primarily economic development planning that is directed towards tourism-related objectives which differ between the public sector and the private sector. In the public sector, most planning is done by different levels of government. Public sector tourism planning includes consideration of economic and social factors, land use policies and 139 CU IDOL SELF LEARNING MATERIAL (SLM)

zoning controls, environmental concerns, infrastructure development, employment concerns, and the provision of public services. Private sector tourism planning is usually concerned with investment objectives involving various aspects of product development, building and design, financial feasibility, marketing, management and operations. Tourism planning is important because it provides a common vision, direction and commitment for tourism which are the result of participation of many representatives. The process of tourism planning includes: ➢➢ Assessing the possible impacts of development and the resource problems which will be faced ➢➢ Analyzing the competitive status of a destination and its ability to respond to changes in the travel market ➢➢ Providing a level of stability and predictability in the progress of the overall development of tourism in a given area. Tourism Master Plan for Destination Many tourism destinations have an overall or general plan that includes all aspects of the tourism development process. This is often referred to as the tourism master plan and sometimes called the comprehensive master plan. A master plan for a destination will vary by project depending on the type of destination being developed, its current level of development, and the theory or style of planning being used. Elements of a master plan usually include economic development, human resources, environmental impacts and social and cultural impacts. Master plans are designed to cover a certain time frame or period such as a five year plan or a ten-year plan. Elements of a Tourism Destination Plan Tourism destination plans generally include the following elements: Tourism Demand Analysis - Demand analysis examines the existing and intended visitor markets for the destination. It involves a market analysis that examines the likely tourist arrivals and characteristics and the travel patterns and trends of the markets. Demand analysis is essential in understanding the competitiveness of the destination with other tourism destinations with similar attractions. 140 CU IDOL SELF LEARNING MATERIAL (SLM)

Tourism Supply Analysis - Supply analysis examines the destination itself including its attractions, accommodations, and facilities. The analysis should include transportation, infrastructure, human resources, and other factors which have a direct or significant impact on the quality of the visitor experience. In the assessment of a new development for a previously undeveloped area, site selection is an important element and the analysis will examine various locations or sites for proposed hotels and commercial buildings. In the case of self-contained resort destinations where planning is for integrated resort development, consideration must be given to a number of factors including: Relationship of the site to tourist attractions  Desirability of climate  Attractiveness of physical environment  Availability of land for development  Access to tourism gateways and regional attractions  Adequate transportation and utilities infrastructure  Attitudes of the resident population to the development  Availability of a local work force and sufficient housing ➢Tourism Impact Analysis - Two of the most important impacts in a tourism plan are the environmental impacts and the social cultural (socio-cultural) impacts of development. While tourism generally is considered environmentally friendly, sustainable tourism development places a high priority on preservation of the environment including land use, water quality, natural scenery, and waste disposal. An important goal of tourism planning should be to protect the natural setting and avoid exploitation of the natural resources. Many analyses include a study of the carrying capacity of a destination which defines the environmental and physical limits and ability of the destination to accommodate a given level of visitors with the least destruction to the natural resources. Social cultural impacts concern the pressures and changes that tourism might bring to the resident population in a particular destination. 141 CU IDOL SELF LEARNING MATERIAL (SLM)

Tourism can have both beneficial and harmful effects on local culture as a result of the use of culture as a tourist attraction and the direct contact between residents and tourists. Economic and Financial Analysis - For most destinations, economic development is the primary reason for tourism development. Tourism is viewed as a source of visitor expenditures which will benefit the local economy, creating spending and employment while increasing the standard of living of the local population. However, the economic perspective differs between the public sector or government and the private sector. For the public sector, the economic benefit for the local community is the most important concern. In the economic analysis for the public sector, the areas which are examined are the type of visitor and spending habits of the visitors, the products and services that the visitors seek, the importation costs and supply of goods required by visitors, the costs related to infrastructure development and maintaining an adequate work force with the required skills and training for the industry. The economic effects of tourism include changing work and consumption patterns, standards of living, and social roles and practices. For the private sector, financial risk and profitability are the primary concerns including the sources of capital for the planned project, extent of foreign ownership or control, wage rates for the local labor force, and availability of private sector funds for investment. Action Plan and Recommendations – The action plan is the final product of the planning process and will depend on the goals of the plan. It generally includes a summary and 142 CU IDOL SELF LEARNING MATERIAL (SLM)

analysis of all of the data used in the planning process and includes strategies, guidelines, recommendations, and schedules for development. Case Study: Master Plans for Effective Destination Management (Croatia) Croatia has emerged as a leader in terms of tourism development in Southeastern Europe. Two critical factors have been identified in the emergence of Croatia’s tourism industry. Firstly, the Croatian Government has taken an active role in developing a state level tourism strategic framework. The second factor of success is the production of tourism development master plans on a local level within the country, focused on achieving goals in the mid-term. Croatia’s tourism master planning process was initiated in 2000, and has incorporated four key principles:  Local focus: Many localities situated on the Adriatic coast (the most important tourist region of the country) developed their own master plans;  Stakeholder involvement: Local Master plans were developed with the involvement of a broad network of stakeholders through a series of workshops held in cities, towns and villages;  Structure and focus: The master plans have focused on means by which competitiveness can be increased (e.g. Vision and positioning, product plans, investment plans and action plans);  Pragmatic orientation: The master plans all have a highly pragmatic and implementation-oriented approach.  The development of local level master plans has been identified as a key factor of success in building a competitive tourism industry in Croatia. Source: Cizmar and Lisjak 2007 10.6 SUMMARY  It is clear that if a tourism destination is to succeed, good planning must take place. Planning is critical to the competitiveness and survival of a destination.  Planning must take into consideration not only the economic and financial interests of the public and private sectors, but also the concerns of the residents of the resort destination and the visitors and their preferences.  Destination planning involves a number of steps and activities that include designing, financing, developing, and marketing of a destination to attract the visitors. 143 CU IDOL SELF LEARNING MATERIAL (SLM)

 It requires cooperation and commitment of a number of different segments including government and community leaders, architects, engineers, investors, economists, environmentalists, and others to ensure the sustainability of a destination. 10.7KEYWORD  Destination ―small-scale financial services primarily credit and savings—provided to people who farm, fish or herd‖ and adds that it refers to all types of financial services provided to low-income households and enterprises.  Destination Marketing- Destination marketing is a form of marketing, in which a destination is promoted to potential visitors, in order to increase the number of people that travel to that location.  Destination planning-is a business plan for building and managing the visitor economy for your destination. ... It allows you to share this information with your stakeholders so that they can use it as a guide to manage and invest in the Destination. 10.8 LEARNING ACTIVITY 1. DefineDestination Planning ___________________________________________________________________________ ___________________________________________________________________________ 2. State the Elements of Tourism ___________________________________________________________________________ ___________________________________________________________________________ 10.9UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. What is tourism destination? 2. What are the elements of tourism destination? 3. What is planning? 4. Why is tourism planning important? 5. What are the levels of tourism planning? 144 CU IDOL SELF LEARNING MATERIAL (SLM)

Long Questions 1. What are the major elements of a destination plan? 2. What is tourism master plan for a destination? 3. What do you mean by primary and secondary destinations? 4. What are the characteristics tourism destinations? 5. What do you mean by management of tourism destination? B. Multiple Choice Questions 1. Tourism sector creates more _________ opportunities a. Job b. Fund raising c. Profit making d. Attractive 2.India needs to change its ____________ marketing approach to modern marketing approach for developing Tourism a. Planning b. Organizing c. Traditional d. Management 3. ___________ country in Asia is emerging as the leading tourist destination a. Indonesia b. Thailand c. China d. Nepal 4. The place at which a traveler terminates his journey is called ________________ 145 a. Destination b. Domestic Tourism c. Excursionist CU IDOL SELF LEARNING MATERIAL (SLM)

d. Mass tourism 5. Destination area must have __________ appeal to tourist a. Attraction b. Accessible c. Available d. Affordable Answers 1-a,2-c,3-c,4-a,5-a 10.10 REFERENCES BOOK  Tourism Planning by Ramakrishna Kongalla, Assistant Professor at Assistant Professor, IITTM, Gwalior.  http://www.forwardanalytics.com/industrial_research/New_Concept_Feasib ility_Research.html http://tourismplanningprofessionals.com/?page_id=60  http://www.mta.ca/uploadedFiles/Community/Research_and_creative/Resea rch_Office/Research_Ethics_Board/Ethics_considerations_for_international _research/Checklist%20of%20Considerations%20for%20Researchers%20C onducting%20International%20Research.pdf  http://web.calstatela.edu/faculty/pthomas/BUS305/FeasibilityStudy.htm 146 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 11: PLANNING FOR TOURISM DESTINATIONS -II STRUCTURE 11.0 Learning Objectives 11.1 Introduction 11.2 Destination characteristics in General 11.3 Destination Competitiveness 11.4 Summary 11.5 Keywords 11.6 Learning Activity 11.7 Unit End Questions 11.8 References 11.0LEARNING OBJECTIVES After studying this unit, you will be able to:  To identify the major elements of tourism destination plan;  To understand the concept of master or comprehensive planning in tourism development;  To understand the importance of tourism destination planning;  To understand the factors that influence the tourism planning process and  To develop awareness about the destination selection process 11.1INTRODUCTION In today’s competitive global marketplace, a tourist destination tends to be seen no longer as a set of distinct natural, cultural, artistic and environmental resources, but as an overall appealing product in a certain area: a complex and integrated package offered by a territory able to supply a holiday which meets the varied needs of the customers. 147 CU IDOL SELF LEARNING MATERIAL (SLM)

Tourism destination is defined as ‘a package of tourism facilities and services, which like any other consumer product, is composed of a number of multi-dimensional attributes’. The more varied the tourism (service) products or tourism experiences are, the greater the number of individual service providers participating in the creation of a tourism value chain. Customers perceive a tourism destination as a whole, a fact which allows the providers in a destination to develop a joint tourism product which can, in itself, represent the attraction of a tourism destination. On the other hand, to achieve the social and economic objectives and to maximize the benefits from tourism, the ‘destination’ has to provide high-quality goods and services to satisfy the local, regional, and international customers. However, without knowing the customers’ most important needs and quality expectations, initiatives in this endeavor are based on guesswork. Therefore, destination authorities and managers have to identify those destination attributes that are the most important determinants of the customer satisfaction and positive post- purchase behavior. In the existing tourism literature, numerous studies can be found about the customer satisfaction and post purchase behavior topics. Conversely, research attempts are quite limited about the identification of the destination attributes for various market segments in the content of micro or macro level competitiveness. 11.2 DESTINATION CHARECTERISTICS IN GENERAL For any tourism and recreation activity i.e. holiday resort, tracking, ski, wind surf, paragliding, bird watching etc., destination choice is a critical issue. There have been several definitions of destination. One of them is, “places towards which people travel and where they choose to stay for a while in order to experience certain features or characteristics a perceived attraction of some sort”. On the other hand, destination is a focus of facilities and services designed to meet the needs of the tourists. For example, a country, city, town or an area could be called as a destination but also a cruise ship is accepted as a destination. Destination choice of the tourists has been of great interest to tourism scholars and many other studies could be added to this list. There are so many factors affecting destination choice process of a tourist. Generally, these factors are grouped into two categories called “push” and “pull” factors. Push factors indicate psychological factors; e.g. values, motives and personality as well as social factors; e.g. age, education, marital status. Pull factors are destination related dimensions; these can contribute formation perceived attraction among tourists; e.g. distance, type of area, infrastructure, size of area, type of 148 CU IDOL SELF LEARNING MATERIAL (SLM)

vegetation and activities in the destination. Also, it is accepted that pull factors (attributes) could be grouped as tangible and intangible attributes. Many destination competitiveness models have been offered so far that can be classified into three major categories: (1) Tourism destination resources and attractors; (2) Tourism destination strategies; and (3) Tourism destination environments. These variables were surface area, price, natural attributes, infrastructure, accessibility, programmed activities, reputation of the destination, restrictions of navigation, population of species, time of journey, entry prices, hotel size and services, parking areas and shops. 11.3 DESTINATION COMPETITIVENESS The Push and Pull Factors Dann referred to a destination’s attributes as the ‘pull factors’. The pull factors (such as landscape, culture, price, service, climate etc.) can pull one to some of the tourism supply components such as attractions or destinations. In other words, the ‘pull factors’ can lead an individual traveler to select one destination over another once the decision to travel has been made. The ‘pull factors’ can be deemed as exogenous forces, which have been characterized in terms of the features, attractions, or attributes of a destination. Dann also examined the endogenous forces, which he named as ‘push factors’. The ‘push factors’ are viewed as relating to the needs and wants of a traveler, such as the desire for escape from their mundane home environment, relaxation, nostalgia, rest, prestige, knowledge, experience, and social interaction. Dann’s ‘push-pull framework’ provides a simple and intuitive approach for understanding tourists’ motivations for travel, and explaining why a certain tourist selects one destination over another. He indicated that “once the trip has been decided upon, where to go, what to see or what to do (relating to the specific destinations) can be tackled. Thus, analytically, and often both logically and temporally, push factors precede pull factors”. It means that push and pull factors can be deemed as relating to two different decisions made at two separate points in time. Tourists, firstly, are pushed by their needs and wants to make a decision of ‘whether to go’, and then are pulled by destinations’ attributes to make a decision of ‘where to go’. Therefore, destination attributes are very important for a destination to be successful in attracting more tourists. Price 149 CU IDOL SELF LEARNING MATERIAL (SLM)

Dann referred to a destination’s attributes as the ‘pull factors’. The pull factors (such as landscape, culture, price, service, climate etc.) can pull one to some of the tourism supply components such as attractions or destinations. In other words, the ‘pull factors’ can lead an individual traveler to select one destination over another once the decision to travel has been made. The ‘pull factors’ can be deemed as exogenous forces, which have been characterized in terms of the features, attractions, or attributes of a destination. Dann also examined the endogenous forces, which he named as ‘push factors’. The ‘push factors’ are viewed as relating to the needs and wants of a traveler, such as the desire for escape from their mundane home environment, relaxation, nostalgia, rest, prestige, knowledge, experience, and social interaction. Dann’s ‘push-pull framework’ provides a simple and intuitive approach for understanding tourists’ motivations for travel, and explaining why a certain tourist selects one destination over another. He indicated that “once the trip has been decided upon, where to go, what to see or what to do (relating to the specific destinations) can be tackled. Thus, analytically, and often both logically and temporally, push factors precede pull factors”. It means that push and pull factors can be deemed as relating to two different decisions made at two separate points in time. Tourists, firstly, are pushed by their needs and wants to make a decision of ‘whether to go’, and then are pulled by destinations’ attributes to make a decision of ‘where to go’. Therefore, destination attributes are very important for a destination to be successful in attracting more tourists. Products are consumed by the form of a package. The total cost of a package plays a significant role in the selection of a destination for all but high- income tourists. There are two categories of price, namely, travel cost - relating to travel to and from a destination, and ground cost - relating to commodity prices within the destination. Both of the two categories of price can influence tourists’ decision making on destination selection. In fact, price, by itself, is meaningless to be attractive to tourists. Only when it is associated with a certain destination, or a tourism product, and their corresponding services and quality, it becomes an important attribute for tourists’ buying consideration. Price competitiveness is usually regarded as one of the most important attributes of competitiveness for a given destination. Studies by tourism researchers indicate the price sensitivity of travelers is high in certain markets. Culture In the past decade, the fast growth of cultural tourism has been leading to some researchers argue that cultural attractions have become the most important attribute, which motivates people to travel. The fast growth of cultural tourism is by two reasons. Firstly, the increasing 150 CU IDOL SELF LEARNING MATERIAL (SLM)